Why the enterprise software industry should be afraid

What I like best about 37Signals, poster child of the Web 2.0 "movement" because in an odd, tangential way, it captures the essence of the Internet-flavored gung-ho attitude that is fueling the trend.

As a complete aside, check out the etymology of phrase gung-ho. Who knew that the most reproduced GI Joe figure was named "industrial workers' cooperative?" Or, for that matter, that a kiwi founded early industrial unions in China? File under "Truth stranger than fiction." For the record, I am using the phrase in the "work together"/"we can do it!" sense, not the GI Joe, workers' collective, or even anime sense.

Anyway, what I find is the distinguishing trait of the Web 2.0 crowd is a determination to return to the roots of the founding of the Internet, with its insistent focus on the simplest solution for maximum leverage of affect. This set the Internet right from the start at odds with the cathedral builders who had brought the computing industry into existence. Not surprising given the animosity between the hackers and the CS department at MIT that tilled the soil from whence the Internet would spring.

When the enterprise IT world woke up to the Web in the 'nineties, a slow process of subverting the "more with less" thinking of the Internet began. E-mail became Outlook or Notes, HTTP servers became application servers, awk and perl became Visual Basic and Java, and the whole thing came to an overly-complex head around J2EE and .Net. The entire transformation was in the service of adding complexity to justify IT investments by the customer firms of the IT industry. Enterprise License Agreements, upgrade cycles, professional support and services, bigger servers, more storage, faster, newer, more spending in a relentless cycle. Sometime around the dot-com bubble bursting the enterprises paused and asked "what am I getting for all this money, exactly?"

What they found is that quite often they are forking out millions of dollars in software licenses to fix the problems created by last year's spending on software licenses. The original "sure, we can do that" spirit of the Internet was dead.

Wait, or was it? The argument is often raised that Web 2.0 is nothing new. That argument is correct, there is nothing new in the collection of technologies and trends collectively referred to as "Web 2.0." At its heart there is something actually quite old - the original spirit of harnessing just the right amount of technology to get the job done. Not enough to justify charging the customer more than you did last year, perhaps, but just enough. And so the software industry faces a threat from "good enough" thinking once again, this time dressed up with rounded corners, neat acronyms that evoke mythical heros and cute made-up names that could be Star Wars characters.

In fact this is a very old struggle, going back through Bill Gates' angry letter to the hobbyists telling them that if they don't stop copying software, no-one will get rich; through the MIT hackers leaving their source tapes in the desk drawers for the next person; through all the way to deep, ancient issues about human ownership, dominion, rights and privileges. But we'll leave the mythic roots for another day.

I found this slide on 37Signals site, in a discussion thread about the relative merits of this slide's design and message. The accompanying discussion centered on its obvious PowerPointiness - "it's too vague," "it's marketing fluff," "programmers suck!" "designers suck!" etc. All the while missing the simple message conveyed by the slide. Marketing message aside, (I know nothing about the AppSight BlackBox software from BMC that this slide is promoting and therefore am ignoring the middle bit with the "Hummer tires" as one comment put it) the important point is: if you dedicate 80% of your time to simply thinking about and analyzing the problem, and 20% to the fix, you will save 70% off your time, cost and effort. I believe this 70% to be a magic number to watch in particular. More than once I've heard CIOs mention numbers in this neighborhood as the potential savings off their current IT budget that they hope to realize by taking another look at how they use technology. A slow-boil approach that emphasizes thinking deeply about the problems and goals, then attacking the fix with a "less is more" attitude.

A market opportunity that is up to 70% reduced, that's a trend about which the enterprise software industry should be very nervous.